Sunday, February 28, 2010

One effect of Greece's recent financial problems is that the country has been on the front pages of the world's newspapers and media sites for the last few weeks. It is not the kind of publicity that any country, especially one which relies so thoroughly on tourism would wish for. As a result journalists round the globe have turned their attention to Athens and with it brought with them an array of misconceptions and cliches which they regularly use to lard their reports.

One of the most common is the use of allusions to ancient Greece in order to explain the present situation. This, of course might make for a clever opening gambit but no more explains what is happening at the moment than an attempt to account for Gordon Brown's policy decisions in terms of King Alfred's burnt cakes or Sarkozi's foreign policy by referencing Gaul. By using these sad, old cliches reporters show us how little they understand about the dynamics of the modern Greek state and the political and economic forces that drive it.

Also the fact that Greece is a popular tourist destination visited by millions each year seems to have blinded foreign commentators to the fact that life really is not a beach. A week spent on Crete or Rhodes offers no more insight into Greece's economic woes than a week spent in a crofter's cottage in the Outer Hebrides can explain The Bank of England's base interest rate policy.

On the other hand the traumatic modern history of Greece which reads as a saddening litany of wars, savage political repression, and privation lightened only by a hard won fight to escape crushing poverty has been ignored in favour of pithy quotes about Athenian democracy. One of the reasons why people are so fearful of what the current austerity measures will bring is the raw memories of the hardships of the post war period, a time which saw millions flee the country in search of a decent living. The horrors of starvation and malnutrition are not just footnotes in academic journals but rather a part of many Greek's folk memory.

Along with material deprivation went a brutal system of social control which meant that those suspected of any kind of leftist or even liberal political views were subject to harrasment, detention or exile. Even though Greece's traumatic civil war ended in 1949 the repression it engendered continued for decades afterwards, seriously delaying the development of a modern democratic institutions.

It is against this backdrop, which is rarely mentioned in the foreign press that people are anxious and angry about what is in store for the country. There is the fear that with the massive cuts in public spending likely to be implemented either by Greece's EU partners or the IMF many will tumble back into the kind of grinding poverty that was the norm just a generation ago and that all the dreams they had for their children will become wishful thinking. With such dire economic conditions the fear is that the autocratic reflexes of much the country's political and economic elites will once more find more fertile ground with the desperate.

Thursday, February 25, 2010

Alas, the sense of irony was lost on the four officers who were harassing this woman as I was going through Navarinou Square this afternoon. Seeing what was happening I swiftly took out my small digital camera and tried to catch the scene so as to name and shame those involved.

However, the cops cottoned on to what I was doing and soon had surrounded me. They wanted to know what I had taken. I don't know why, maybe it was a sense of outrage, or the streak of stubborness that I inherited from my father but I said no.

"No. Why should I?"

My first mistake - the worst thing you can do is challenge the police here, question their right to do what they want. I know this yet even as these thoughts are going through my mind I find myself going one step further,

"You don't have the right to see my pictures"

Now the number of armed cops has risen from four to seven, the one at the back is talking into his walkie talkie, saying something about somebody causing trouble.

Next they wanted to see my passport which had been stolen a couple of weeks ago. This revelation brought a smile to their faces as without ID they are within their rights to take me in. At this point I phone my friend Eleni who is a lawyer.

She got them to accept my driver's licence as an alternative and also meant that there attitude softened a little. The fact that I had legal advice "on tap" meant that they had to proceed differently. Eventually, facing the choice of either spending a night in a police cell or deleting the video I had taken I chose the later.

Not the bravest decision I've ever taken but perhaps one of the more sensible.

Thousands of Greeks have taken to the streets to show their rejection of the government's proposed austerity measures, which are supposed to right the country's flailing economy. Our Observer in Thessaloniki was in the middle of the protest there, along with his camera.

Craig Wherlock is a British expat based in Thessaloniki. He's a teacher at a private school.

I think there were between eight and nine thousand people in the streets [7,000 according to the police]. Unlike in Athens however, there were no clashes here.The marchers were mainly public sector workers as their unions, like the PAME [communist], are the most active. But there were also employees from the private sector amongst them. Everybody's worried about the wage freeze, cuts to social benefits, an increase in VAT (from 19% to 21%) and the changing of the legal retirement age (currently 60 for women, 65 for men, but could be set at 67 for all).

So they're wondering how the country managed to amount 300 billion euros of debt - what was that money spent on? Certainly not, they say, on public services or roads. The protestors have the impression that politicians robbed the country blind. With the former government, there was a corruption scandal every two months. So talk of wasted money is still rife. The former health minister ordered 16 million doses of the H1N1 flu vaccine, but only 400,000 were needed in the end.

I saw the slogan ‘plutocracy should pay for the crisis' - which pretty much sums up the feelings of the protestors."

Wednesday, February 24, 2010

In what promises to be the first round of a new series of confrontations between Greece's trade unions and the government public and private sector employees went on strike today across the country.

The strike action has paralyzed much of the nation's transport network and was accompanied by mass demonstrations in Athens and other major cities. As prime minister Giorgos Papandreou desperately tries to persuade Greece's EU partners that his government can reduce the massive $420 billion public debt burden threatens to destablisise not just Greece but the entire eurozone area.

However, recent government actions to raise revenues and reduce costs have put it on a collision course with trade unions anxious to protect members incomes and jobs. With some of the lowest wages in EU and unemployment rapidly rising labour leaders argue that the cost of country's debt repayments should not be shouldered by the country's poorest.

In Greece's second city between 8,000 and 10,000 marchers took to the streets demanding that the country's rich pay the price for the present crisis. European Union flags were also burnt in protest against the role of Brussels in role in applying austerity measures which threaten to derail the Greek economy and make any possible debt repayment plan even more difficult.

Monday, February 22, 2010

You would think that after a monumental failure of governance such as the one that Greece is experiencing in the wake of an unprecedented financial crisis that those responsible would be at the very least keeping a low profile or even furtively fingering their passports should the need to rapidly exit the country become apparent.

On the contrary the conservative New Democracy party that ruled the country for the last five years and in large party morally resonsible for a substantial portion of Greece' massive foreign debt has doggedly refused to accept that it is to blame for the worst crisis Greeks have faced since the tanks rolled into Athens in 1967.

Instead of heading for the hills to avoid lynch mobs the new leadership headed by reformed ultra - nationalist Antonis Samaras has led a media attack on the present PASOK government's handling of the meltdown that threatens to condemn Greece to penuary for the forseeable future. There has been little or no mention that his party one not one, but two general elections and helped pile up a mountain of unpaid bills that now have to be paid by the 11 million citizens of this country unlucky enough not to be MPs with salaries that start at 6100 euros a month and are guaranteed a pension for life after just one term in power.

Can there be any more galling sight that that of politicians who managed to rack up more than 50 major scandals in the space of five years lecture us on good governance? Now Samaras has argued that attempts by PM Giorgos Papandreou to set up a parliamentary committee to investigate the current debacle are premature as they would damage Greece's credibility.

I'm not sure which part of the South Pacific Antonis Samaras has been marooned upon for the last month but obviously no news of how the New Democracy party has dragged Greece's name through the mud internationally has managed to reach his ears.

If Greece has any credibility left with international political and economic circles is open to debate and if it is to regain any the first thing it has to do is find any punish those responsible for the fact that the country lies on the brink of disaster.

However, its is a also a matter of debate whether MPs will be willing to investigate fellow party members and get the bottom of this case which involves both major parties. If previous enquiries such as those into the Vatopedi land swop scandal or the Siemens corruption case are anything to go by then I believe no.

In which case can the present political structure be trusted to reform itself to avoid a repeat of this disaster? My view is that it cannot as the disfunctions that have led us to this present pass are hardwired into the system and that any attempt to change it is doomed to failure.

Thursday, February 18, 2010

Much of the current media coverage over Greece's debt crisis is focused on how the country is going to raise the funds necessary to cover the $400 plus billion it owes creditors. Scenarios concerning the role of Germany and/or France in bailing out Athens are discussed constantly on national TV and in the newspapers and what will need to be done in order to convince Greece's European partners to cover cost of lending the billions needed just to keep the country afloat.

However, whatever happens in the coming months the question of what Greece does next in a world in which its financial choices are closely scrutinised by whatever monetary institution steps into the breach to save the country from bankcruptcy has not been addressed. The prospect that an elected socialist government will be obliged to implement a conservative fiscal policy controlled by unelected officials raises all kinds of political dilemmas which Giorgos Papandreou's PASOK administration will have to deal with in the immediate future.

Papandreaou will be forced to challenge directly exactly those public sector trade unions which have put him and PASOK in power. In addition he will be forced to cut areas of spending which have been used by successive government to ensure political support.

The prospect of a place in the Greek civil service has long been the source of political power for parties on the right and left of the political spectrum. This combined by the promise of public sector contracts to economic elites in the private sector form the basis of the country's feudal political structure and in no small measure contributed to its present woeful economic situation.

Instead of land and power being swopped for military service the present Greek version of feudalism sees votes and political support flowing up the system in return for public funds and the influence it garners flowing downwards. It is a structure of patron-client relations which links the heads of the major parties to the humblest villager and is the lifeblood of modern Greek politics.

The ebb and flow of such influence and the complicated web of personal, familial and political relations that it engenders helps explain much of the apparent confusion and chaos of modern life in Athens and other major cities. Much of the country's infrastructure is divided into a patchwork of competing fiefdoms that have formed as a result of the present political setup. Each participant owes their position and continued economic well-being to maintaining the right connections with those above and below them in the hierarchy. In such a system qualifications, skills, effectiveness and ability play second fiddle to being able to curry favour with those who are in a position to advance your career.

Another by - product is chronic inefficiency and confusion as its duty of every fiefdom to ensure that it gets the maximum amount of resources in order to guarantee its survival. Co-operation and cost cutting mean giving up exactly those resources one needs to make sure that money and influence continues to flow to those whose support you need.

The effects of this system also affect the private sectors as the companies competing for contracts with the public sector, a huge player in the Greek economy, do so on the basis of political, personal and family connections. In some cases this takes the form of outright bribery but many others there is the mutual understanding that favours given must at some point be returned. It is no coincidence that many of the country's richest men have media wings attached to their business conglomerations which can be used to promote or attack parties and politicians .

The upshot of this unholy alliance is that crony capitalism and "licence Raj's" dominate the economy stifling innovation and competition. There is little incentive to cut the cost of your product or improve the quality of your service in such a system. As a result Greek companies which dominant nationally rarely have the expertise to break into developed markets where transparency means that methods used at home cannot be employed.

Whilst foreign observers often point the finger of blame at Greece's powerful public sector unions for lack of competitiveness and low productivity the reality is that pay in the private sector has remained stagnant for years and that much critised worker protection laws that supposedly coddle unsuitable employees are rarely applied to non - public sector businesses. Despite a pool of cheap, educated labour which can be hired and fired at will the private sector has done little to prepare for the demands of a modern globalised economy and instead reaped the benefits of low wages while raising prices far beyond the rate of inflation.

It is difficult to see how an economic and political system run on such principles can reform itself in the kind of time scale being proposed by Europe and controlled by exactly those people who helped run the country into the ground in the first place. The obvious answer is that Greece will not be able to implement the kinds of reforms being demanded and that in trying to square the circle the country will tear itself apart as different social and economic groups turn on each other to preserve a semblance of their priviledges and power.

Wednesday, February 17, 2010

Today Greek prime minister, Giorgos Papandreou is in Russia, yet another stop on an itinerary which has seen him flit across the globe in a desperate bid to secure fresh funding for Greece's troubled economy. Faced with $420 billion debt the small Balkan nation with a population of just 11 million has sparked off a crisis which threatens to derail the European Union's grand experiment in creating a unified currency which started in 1999.

The revelations that Athens had massively under reported its debt load and so violated the conditions of the Stability and Growth Pact saw the light of day with the election of the centre left PASOK party in the country's national elections in October. The news that Greece's foreign debt load had reached 12.3% of GNP sent shock waves through European political and banking circles, raising the possibility that the Greek government might not be in the position to honour its monetary commitments.

The chance that a Eurozone nation might default on its repayments sent the cost of Greece's foreign loan requirement soaring and forced Germany's foreign minister Guido Westerwelle to backtrack on previous statement that the country had to put its own house in order before asking its European partners for help.

However, despite the storm of criticism Greece has weathered over its bloated public sector, rampant corruption and falling competitiveness the problems that Greeks face also have their roots in factors which have little to do with the country's internal pathologies that have long been known yet until recently politely ignored by fellow EU members.

As with the other PIIGS (Portugal, Ireland, Italy, Greece and Spain) nations the introduction of the Euro as a common currency has seriously limited the ability of governments to regulate their economies so leading to a fall in competitiveness. Unable to adjust their local exchange rates businesses in Europe's soft underbelly have been gradually losing traditional markets due to the rise in cost of their products caused in part by the strength of the Euro. Unlike their northern European partners such as Germany and France the introduction of the Euro has lead to rising costs and prices which their economies have not been able to offset with rises in productivity.

However, the current crisis its roots in the European Exchange Rate Mechanism which means the the European Central Bank is obliged to support the Euro should it fall or raise by 15% against other currencies. As Britain learnt to its cost during Black Wednesday in 1992 such a commitment means that the currency could be the object of speculators who make vast fortunes selling back Euros to the ECB as art of its attempt to shore up the price of the currency.

The UK burnt through 27 billion pounds in the course of a day in a failed attempt to prop up the currency, making international financier George Soros $1 billion dollars richer and leading to Britain to withdraw its application to join the ERM.

With the chance that such a feat could be repeated on a European wide scale with even greater profits there is the possibility that the intense financial pressure of Greece is simply a stalking horse for a larger effort to weaken confidence in the Euro so leading to a fall in its price on the international money markets and so triggering a buying spree by the ECB which could reap billions of dollars in profits for banks and speculators.

None of this bodes well for Greece since the underlying fundamentals that laid the country open to attack by speculators have not disappeared. The country still continues to be plagued by a lack of innovation and a public sector which has ballooned out of control to such an extent that even ministers have no idea how many people they employ. In addition any serious econmic policy is necessarily hampered by the fact the succesive governments have cooked the books so extensively that the basci data needed to plan changes to the economy is next to useless.

The demands by France and Germany's conservative governments that Greece radically cut public spending and raise more revenue by taxation is certain to create a wave of intense protest by public sector unions who will not willingly agree to pay cuts or loss of jobs. In the long term a shrinking public sector is unlikely to help address fundamental productivity issues which stem from crony capitalism and the existence of shadowy price cartels which mean that Greek businesses have traditionally only invested in innovation as a last result, relying instead upon personal and political contacts with the country's main parties in order to secure contracts and inflated profits.

It seems too much to expect those who have created a system whereby huge amounts of money can be earnt with minimum risk to change the habits of a lifetime and take their chances in the cold waters of real competition in harsh international markets.

As promised I thought I'd let everyone know what has been happening on the camera front. Last week I tipped out my tip jar (which totalled 550 euros and after deducting transfer fees and a tips for the site I was left with just over 500 euros which I sent to my friend, Eleni's bank account. Since I still don't have a passport to replace the one stolen I have no way of retrieving money from my own account.

In the next few days I will use that money along with my own to buy a replacement for the D80 Nikon which I lost. I have come to the conclusion that the best camera would be a Nikon D90. If anyone has any ideas about where I could get one at a reasonable price please let me know.

In addition D H Morton has also given me one of his cameras along with memory cards and a manual. As you can imagine I'm like a kid on Christmas day. It's just the kind of compact camera that I need for situations when having a big DSLR hanging round your neck can be a liability.

As anyone who follows this blog knows the coming months are going to see a lot of upheavals in Greece and hopefully I will be able to record them and give the kind of background to what is happening that a lot of the international media is unable or unwilling to.

Saturday, February 13, 2010

According to Greek prime minister Giorgos Papandreou yesterday's decision by the country's European partners to bail out Athens was a “breath of life”. However, the decision by the EU to rescue their southern partner from the mercy of international finance markets may not be enough to put Greece back on a sound monetary footing.

For the past month the European Union has seen the integrity of the Euro threatened by the prospect of Greece defaulting on its massive $419 billion debt load. Whilst Germany has made it clear that Greece should put it's own house in order rather than let relay on its European partners the prospect of a domino effect involving Portugal, Spain and perhaps Italy has raised the prospect of a direct threat to the viability of the Euro itself.

However, even if Greece does manage to find the funding to service its debt in the immediate future the country faces the reality that any such bailout will come with strings attached and that in essence the country will have to cede control over its financial policies to Brussels.

Already the recently elected left wing PASOK government has announced increases in tax on petrol, alcohol and tobacco as well as saying that it will freeze public sector pay for two years. In addition sweeping changes in taxation, social security and public spending aresaid to be in the pipeline.

Doubts remain though over Athens ability to implement such radical changes given the massive public resentment they have created with the country's civil service trade unions. Already proposed changes to police and armed services pension contribution schemes have been postponed in the face of opposition.

Also the ability of Greece notoriously corrupt tax authorities to get tough on tax evasion has been questioned by Greeks long accustomed to such calls by political parties on both the left and right. As one Thessaloniki taxi driver drily put it, getting Greece out its present fix by raising taxes is like bailing out the Titanic with a sieve.

As well as strikes and public demonstrations there is also the fear that growing social unrest will spark off a repeat of the month long revolt which swept the country in December 2008 following the death of a teenager, allegedly shot by the police in central Athens. Although the violent street confrontations have died down the clashes have given rise to a resurgence in terrorist violence which has seen police stations machine gunned and almost daily firebomb attacks on banks and government targets.

Beyond the immediate problem of excessive public spending Greece faces enormous macro – economic challenges which have been growing since it joined the Euro-zone. By adopting the Euro the country has gained financial stability at the cost of raising prices and shrinking competitiveness in international markets.

With the old Drachma Greek products and services could exported at more competitive prices and the government could, if necessay devalue the currency so cutting prices in international markets. The rise in cost brought on by the Euro combined with cheap Chinese textiles an manufactured goods have decimated Greece's industrial base, especially in the north of the country where unemployment was rising steadily even before the present crisis. As with East Germany's adoption of the Deutschmark the use of the new currency has made Greek goods too expensive for their traditional markets.

In addition the country's endemic corruption has meant that many Greek companies have long relied on personal and political connections to win contracts with the state and so have had little incentive to increase productivity or lower costs. The result of decades of such crony capitalism is that such countries are ill – equipped to operate in international markets.

The existence of shadowy price cartels has also helped blunt Greek competitiveness as many parts of the economy and especially the retail sector is able to avoid damaging price wars and so has done little to improve service or reduce costs. The irony is, as the Greek media has been quick to point out that feta cheese is now cheaper in Berlin or Amsterdam than it is in Athens.

Although Greece's leader has pointed the finger of blame at the previous New Democracy government for hiding the scale of the country's financial woes the truth is that ex - PM Kostas Karamanlis was simply following the strategies inherited from the previous PASOK government's who systematically hid debts in order to meet the entrance requirements for the Euro-zone.

It should be noted that Papandreou held several high level posts in the PASOK government from 2000 – 2004 including responsibility for the 2004 Olympic Games which ended up costing 10 billion Euros, nearly three times that of the Sydney games in 2000.

The Greek parliament is still investigating charges that the German based Siemens corporation spent millions bribing Greek politicians in both major parties in order to win security contracts.

I woul like to say that I am now closing the TipIt account that I set up last week following the theft of my camera equipment. First of all, I would like to thank everyone who contributed and say that you have really helped me in this most difficult of moments. As a result of the money you have given I will now be able to get a replacement camera and continue with my citizen journalism and photography, which as you all know means a great deal to me.

In the interests of transparency and so you know where your money is going I'm going to post all the details of what I have been given (see here) and how I use it.

In the previous week you contributed a total of 550.85 euros (at today's exchange rates) of which Tipit.to has deducted 6% - 33.05 euros leaving a total of 517.80 euros.

In addition some of you contributed 40 euros via Paypal.

In the coming week I intend to use this money along with some of my own to buy a Nikon D90. I have chosen this model as my previous camera a D80 is no longer in production and also because it has the ability to record video which makes up for the loss of my own video camera. I am familiar with layout and abilities of Nikons in general. If anyone has any ideas about where I can buy this camera at a good price I would be most grateful.

I will keep you all up to date over the next few days over what is happening on the camera front.

Once again I would like to say thank you and remind everyone reading this that this is only possible because of your generosity.

Wednesday, February 10, 2010

According to the leading Greek newspaper Kathimerini, the next 72 hours are going to prove crucial if the government is to convince European and International money markets that Greece can be trusted to implement its Stabilisation program and reduce its massive $400 billion debt load. Athens, Greece. 10/02/2010.

The program announced this week by recently elected socialist prime minister Giorgos Papandreou has angered civil service trade unions unhappy with goods in bonuses and the promise of a two year wage freeze. In response the civil service trade union confederation ADEDY called a series of stoppages and strikes for the next three days. The action has grounded all flights in and out of the country and severely disrupted train timetables.

In addition trade unions and left wing political parties organised marches in Athens, Thessaloniki and over 60 other Greek towns. Braving torrential rains thousands took to the srtreets to protest the government's austerity measures.

Despite promising wage increases and a rise in unemployment benefits the left wing PASOK government is unlikely to concede to worker's demands as such a move would weaken attempts by Athens to secure a European backed bailout package. Despite initial talk of Greece putting its own economic house in order intense pressure by speculators has raised fears that if Greece defaults on its financial commitments failure would have a knock on effect on Portugal and Spain and so threaten the Euro itself.

Sunday, February 07, 2010

I thought I'd keep you all up to date with what has been happening over the last week. Following the theft of all my camera equipment last Tuesday people have contributed 511 euros via Tipit and 40 euros via Paypal. This is more than I ever possibly thought possible.

I Intend to leave the Tipit account open till next wednesday, which one week after I set it up. Then I will use the money to buy a replacement camera. I will keep you up to date with what I buy so you can see where your money went.

Friday, February 05, 2010

At the beginning of this week I had all my camera equipment stolen, an event which tore a hole in my world. It brought back to me all the other things I have lost recently; parent, friends and other things I will not bore you with. All the things I have been trying hard not to think about. It was more than just about the loss of stuff and so touched me on a much deeper level than I thought I could handle.

Yet from the very beginning I have been innundated with offers of help and support from so many sources, even from people I have not had the chance to meet yet. It has been a wonderful experience which I find difficult to write about as I don't know quite how to express my gratitude without resorting to the standard cliches which are simply not to the task of sharing what I feel.

In the absence of a more elegant option let me once again say how thankful I am for all your help.

Wednesday, February 03, 2010

Following many offers of help I have decided to set up a TipIt account (see here for more details on who they are) If you feel that you'd like to help me replace the camera equipment that was stolen and so allow me to continue photographing and reporting what's happening here in Greece please feel free to contribute.

The day after. Can't say that I slept well last night. Woke up at 5am with a terrible sense of loss. At first I thought it was just the bitter aftertaste of a bad dream only to realise that I wasn't dreaming about what I had lost.

Yesterday somebody stole much of what I treasure most in terms of material possessions. My camera, lens, video and various assorted knicknacks just disappeared whilst in was drinking coffee in Starbucks. Of course, this is just stuff, nothing that can't be replaced. The objects were not unique in themselves, indeed the only thing that made them special were that they belonged to me.

On the other hand the represented far more than just a bunch of lenses and chips, they were part and parcel of what has kept me sane over the last few years when the rest of my life seemed to lurch from one crisis to another and offered a way of not letting it all get too much.

I always thought that something would happen to my camera but I reckoned that would involve being in the wrong place and time in some riot or protest. Or that it would be confiscated by the authorities to enter a legal limbo from which it would only emerge years later.

After coming through riots, confrontations, beatings, road accidents unscathed and all kinds of other abuse while in my backpack it seems so wrong that I should lose this stuff in something so stupid a manner.

Thanks to everyone who has sent messages of help and sympathy. They have all been most appreciated.

Tuesday, February 02, 2010

Just had my bag stolen from Starbucks here in Thessaloniki. Inside was my camera, lens, video camera and a passport. Close to 1000 euros worth of stuff nicked from under my eyes. I was going to visit the farmers' roadblocks and take some more pictures, guess that won't be happening soon.

Neither I nor the people around saw anything strange or untoward. Just disappeared from next to my feet while I was busy doing a translation on laptop.

The worse thing is that I don't know if I'll be able to replace all this stuff. It's certainly not equipment I can afford to buy now, and I'm not sure when I'll have that kind of money. It represents a lot of hardwork and sacrifice which cannot be clawed back easily.

I've just spent the last couple of hours going from police station to consulate to report the loss of the passport but they said that I should check out all the rubbish bins in the area just in case the thief dumped it with the passport inside.